tv Bloomberg Markets Americas Bloomberg February 6, 2017 10:00am-11:01am EST
vonnie: we're going to take you from new york to london and cover stories out of washington dc, paris, and moscow. these are the top stories we're following. the legal battle over the travel ban remains hotly contested. it appeals court could rule today on whether to reinstate the ban on travel from seven nations. there will be a news conference this hour over the scandal involving his wife's job and he is expected to fight back in a last-ditch effort to save his candidacy. how has political uncertainty in france and beyond it changed the business climate in europe? we will hear from one of the largest energy companies.
the mondayutes into trading session. seen ishe strip we have continuing today. we have been on this long street without a move the s&p 500 and longer if you look for a 1% drop in the s&p. that continues today. we have a little bit of it downward i.s.. it's down 1/10 of 1%. what we've been watching and the trend we have talking about regularly is the low volatility environment for u.s. stocks in we have low correlation among u.s. stocks. take a look at the bloomberg. this is what we are watching here. the vix is in blue. we saw some spikes in volatility over the last year or so along with a measure of correlation. how much are they moving together in the s&p 500? it makes sense.
you've got both of them low at the same time because you don't have stock moving together. it's hard for risk to spike as they all go down. that's a trend we are watching. i wanted to look at some of the big movers to the up-and-down side. that's a sharp contrast with the competitor. the sales are up by 11% last quarter. revenue is up 52% in its girl category. those results are helping to shares. customer product giant. it's the maker of rubbermaid. they are down 7%. sales are narrowly missing estimates. the company is cutting its forecast. it says among other things it sees pressure on mall-based retailers.
that is presenting a problem. we are watching the natural gas industry. they won approval to build a natural gas pipeline expansion. it is called atlantic sunrise. though shares are up 10%. we are watching range resources with an upgrade. what's going on in europe? mark: drift is the perfect word to describe where we are as well. we are down .4%. the only group that is driving his health care. up i aboutr, we are .3%. the european fear index is down 10%. there are no signs of volatility within the equity asset class. we will speak more about this later. a drop in third-quarter earnings. startingity glut is
shares to tumble. they are forecasting little change in profitability. 17%, more than its previous forecast. that trend is going to continue. since brexit, the shares are up 8%. two days after the vote, they fell by 24%. in the republic of congo, the ivory coast rose 25%. gold prices rose. miners were boosted by gold for the first time in four years. gold slumped 44% through december. that is the 10 month low. they have risen by 11% this year. they rebounded from that for quarter slump in it was the
biggest slump in three years. keep your eye on the french government bond market. the white line is the french 10 year yield. it has doubled to the highest level since 2015. the republican presidential candidate will speak to sour. it will be fascinated here with he has to say about the scandal surrounding members of his family. that has engulfed his residential run. this right now is in the highest level since 2013. let's put all this in perspective. this is a chart going back to 2008. as you can see, this is the height of the sovereign debt conference. this is where the spread was roughly 5%, we are nowhere know those levels. the ecb despite talk of a taper is a backstop for the european on market.
it's a fascinating chart showing the yield and the spread differential are in we are awaiting his speech. jonathan: we will bring you the relevant points of that speech. we are turning to the battle of the bans. for the latest on the legal fight, let's go to bloomberg. a's decision in washington state and we had a massachusetts court ruling. the president tweets about both sets of judges. where do we stand now? its continuing in the court system and online with president trump between at his feelings about judges blocking his immigration ban. this is a day with the administration has until 3:00 to put in its latest court battle.
it could end up going to the supreme court does there are conflicting court rulings on this ban. is on hold now, it for now. it doesn't have the force of law. the judge in washington state has called for to be put on hold. we also heard from business leaders and companies including microsoft and several other companies like amazon saying it is something that they oppose because it hurts their it hasce. the judge said to be on hold. the administration is going to file its claim in the court battle later today. you vonnie: if this does go to the supreme court, it could happen much faster than a typical case like this. who does it benefit if there are
only eight justices on the court? becauseis continuing president trump announced his pick for the ninth see the supreme court arian right now, there are four justices that were appointed by democrats and four by republicans. it's an even split the could force the issue to not be resolved if there is not a ninth seat chosen. that increases the pressure on democrats to oppose the night seat with more of a conservative justice. it seems like that is going to increase the political pressure and heat on this battle concerning the judge that president trump wants to support on the ninth seat and have the swing vote on this type of case. what is the economic angle of this. the companies on the west coast, the technology companies will be
eager to keep the flow of immigration going because they rely on it. talk us through the economic backdrop right now? >> win this ban was first announced and what was rolled out in the chaotic way that happened last weekend about 10 days ago, they showed that they had several employees who were impacted by this, they flew abroad and could not come home. several of these companies have said this type of ban because it is so broad and it doesn't seem to targeted sweep in people who are u.s. residents who were ,orking at various companies they have come out in strong opposition to it. they say it hurts the bottom line. that's an argument that has resonance with the washington judge who put a halt on the ban.
i believe we will hear more from some of these companies going forward about how this harms their bottom line. joining us, for reporting from the white house today. other news, 97 companies have condemned it. from the lastely answer. filedst 97 companies have an impassioned legal brief. the steps up the opposition to him in recent weeks. stephanie: the list that signed is a who's who of silicon valley. the argument is it's harmful to our business. it's disruptive. it prevents us from people traveling freely. it's going to make it harder for them to hire the best and brightest.
many of those tech companies that signed this brief met with him in december. from what we know, they raised the issue of immigration and he was open and understood what they were talking about. it just shows you how quickly things can turn around. to puthey were going forward ways to help fix this issue and offer policy. do we know how that is progressing? stephanie: i think they decided that supporting the lawsuit, they are not parties to the lawsuit, they are non-litigants providing support to the case. an important move. who knows what will come next. maybe they will take legal action and become a party to the lawsuit. it's an amicus brief right now. what is an amazon join it? stephanie: that's a good question.
level ofine the coordination that was needed to put this list together, to get all of these companies to sign it. it happened incredibly quickly. it's rare you get this level of coordination among tech companies like this. vonnie: amazon did play a part in that letter. there has been communication with amazon. they made their point clear. other the company that signed it has a big impact, maybe not just legally. a big impact on the public relations battle they are fighting. mark: are we hitting a crucial juncture here just a couple of weeks into the new administration? we had that big gathering of ceos. there was a big piece of the beginning when he was joking with them and welcoming them and talking about repealing
dodd-frank. are we really beginning to witness some sort of throwback between the business community and the new president? the uber founder step down from that distance advisory council, not running to suffer the blowback with associated with trump. this hits the message of trump saying he is a pro-business president with almost 100 companies coming up against him saying this is harming our business, how does he respond to that? he is a businessman himself respond to the ceos saying you're hurting our bottom line. mark: thank you very much for joining us. in on,.let's check witheresa may is meeting
benjamin that yahoo!. he asked me to support new sanctions on iran, saying it wants to destroy israel. the u.k. is committed to a two state solution. pressure has rejected president trump's assertion that iran is the world's not one terrorist nation. russia's foreign minister says it should be in a coalition to fight islamic state. russia values its friend rate relations with iran. far right leader le pen will take back control of the central bank and leave the company -- country out of the euro. that is according to her chief economic advisor. she would have the same nationalist forces that donald trump had it. tom brady did lose something of the super bowl. after the stunning win over the atlanta falcons last night, somebody made off with his jersey from the locker room.
he told a reporter it's going to end up on ebay it am point. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. mark: happening right now, a french presidential candidate is having a news conference. he said his wife salary was perfectly justified it. he worked as a politician. breach the law. he said the accusations are baseless and he understands the questions. he understands the need for clarifying them. you can watch is full remarks on the bloomberg. this is bloomberg. ♪
mark: why from london and new york, i am mark barton. vonnie: this is bloomberg markets. it's time for our latest business flash. ceorecent report the disney rob eiger may extend his tenure for third time. he is scheduled to retire in 16 months. there is no successor insight. he might be replaced by his former chief operating officer. bill gross says investors must brace for a financial methadone of quantitative easing. the ecb and bank of japan have pulled their sport. keepingentral banks are interest rates artificially low. big cuts are on the way for the
management ranks. cut 60k will cost -- senior staff. the number of top executives will be reduced by more than half. that is your bloomberg business flash. around thevolves fiscal policy of deregulation and to mystic agendas. with thetzker sat down head of global macro and asked the current paradigm shift. henry: this is the first time in 15 or 20 years where we have an inflection point. we are trying to highlight a couple of things. one is we see a major shift from monetary to fiscal. i think you're going to have government spending driving incremental growth.
the second thing i would say is removing the authorities. it feels like we're moving from global agendas to do mastic. that has impact on trade. i think you heard some of this last week. we are going from reregulation to deregulation, especially about energy and financial services. health care will be in the mix at some point as well. you are moving to a world will a -- where a lot of the volatility is in the equity market. basis,ly, on a sustained most of the volatility has been in the currency market as people wrestle with qe. our view is that is shifting more into the interest rate market then any time. thosepeople may look at forces or themes that you govern the going to
macro environment and say that sounds about right. maybe it sounds right for the u.k. where some of the same forces are playing out. what about the rest of the world? henry: this may be missed by many investors. there has been a lot of talk about brexit. if you think about china and our estimates, china's dust of it -- deficit is 10%. --s huge different read difference. they put $1 trillion of stimulus into the economy. that's about half their gdp. there is a lot going on but scenes -- behind the scenes where they are using fiscal to get some reflation. where were in a time were there was slow growth. that in my mind and it right after brexit. we think rates of autumn.
we are think we are in more of a reflationary. that's going to create more volatility overtime. we may not all be economists. i think people can understand fed jargon more than they can what is being said with president trump right now or anyone. if you look round the world, we have a lot of strongmen. we haven't seen this in quite some time. these are people who have very strong agendas. you are creating some nationalist fervor and that is before i get to the continent and what's going on in europe. still ahead, our guest is the chairman. how the topsy-turvy french presidential race impact the business climate?
mark: this is bloomberg markets. i am mark barton in london. vonnie: let's check in on some market movers. we have julie hyman. julie: i am watching off analyst calls. let's start with the airlines. bernstein is upgrading delta airlines saying that for delta the upside might come from progress in implementing the new revenue management. for american, it only -- no longer has a downside. goes to an outperform an american to a market perform. both of those shares are moving higher. we have chipotle. the stock could fall further. they are bears on the stock.
they see the food safety scare and the rebound could involve sourcing and marketing costs. we have a quick look at the bloomberg. this is a consensus on the stock. the green is the high rating. there is a lot of neutral here. we have seen a sea change in opinions on the stock. mark: thanks a lot. still ahead it, our guest is the chairman of suez. this is bloomberg. ♪
first news with emma chandra. >> the trump administration will try again today to get its controversial immigration ban restarted. the justice department will permit final arguments, enforcing the ban through a federal appeals court. the battle could end up in the supreme court. president trump still wants members of nato to play more for their expense. .hat came up in a phone call the white house said the president did express strong hopes toor nato and take part in a summit of leaders in late may. on capitol hill, a big day for president trump's controversial choice for education secretary. a final vote on betsy devos is tomorrow. vice president mike pence may have to vote to break a tie. investors from the middle east are taking advantage of a plunge in the pound. managers, theynd
have more commercial real estate in the fourth quarter even as brexit chases away other buyers. acquisitionserseas in the fourth quarter, that is compared with 10% a year earlier. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am emma chandra. his is bloomberg. mark: happening right now in paris, french presidential candidate francois fillon is playing offense as his rivals play offense. he has been speaking at a news conference in attempt to cover control. he says he has been the subject of unprecedented attacks and that he is getting huge campaigning renewed energy. more from our paris bureau. what has he been saying? >> the paper was describing this press conference as a survival
operation. but so far it is more of a transparency operation. francois fillon has been disclosing everything, assets and bank accounts he has. he has been saying that the salary of his wife, while working as his assistant, was perfectly justified and that his two children were perfectly legal. he said he will give more disclosure of all his assets tonight online. really, it is a transparency operation. he says he understands the moral obligation of a presidential candidate like him. he wants to stay in the race for now and he is also apologizing to the french for the lack of transparency. meantime, the void
that has been left is being and le pen.. macron they had big rallies over the weekend. leading in the first run of this presidential election on april 23. they both had a separate competing meeting in the second-biggest ct in france over the weekend. we have more details on marine le pen who unveiled a program with more than a hundred proposals. it is most worrying for investors, the promise she made to hold a referendum for france to leave the eu and the euro single currency. she said she wanted to curb cutting countries from 2000 year to 10,000 year.
she has benefited from all the allegations around francois fillon and said she wanted to simplify the labor code and push defense spending. and gdp required by nato. macron is holding a meeting tonight in paris where he said he will spill more details about this program. on bloomberglive television this morning and she was telling us the fact that she political experience, which has been a criticism, is actually a plus because the french want to get rid of the old guard. vonnie: it seems like the french have different standards for the politicians. wire they taking this seriously? with all the allegations we have seen around the former french president, nicolas sarkozy, the france --
the french are taking the ethical question more seriously than they used to and the fact that francois fillon is acknowledging this in his press conference, he says even though everything was legal and all the cell in the -- all the salaries of his wife and children were justified, he understands the normal questioning of the french people. that is why he wants people to apologize to them. themost roaring thing was sunday newspaper saying that 68% of the french did not want fillon to maintain his candidacy in more than 70% were not sure if he was honest. mark: thanks a lot. reporting from paris. for more on the french elections and brexit, we turn to gerard mestrallet. he is in charge of developing and promoting france's financial
industry and also owner of the french energy company. , he joins us now with win why. thisat extent is uncertainty surrounding the campaign meeting businesses in london are wary of committing to paris right now post-brexit? situationnds on the and financial institutions. we understand that they would wait for the elections before taking a final decision because between being decisions is if they decide to cross over the channel. them, like hsbc have already decided to go to paris and transfer 1000 people. have --
mark: financial services companies leaders. >> we have met 80 financial companies leaders. president of the and the vice mayor of paris and also the president after metropolis. message to to send a londoners. we are friends. the cooperation between paris and london has always been very strong. and we have a cooperation agreement and we have decided to prolong this cooperation after brexit. if the consequences of the brexit and the financial passport, which normally would disappear, if the consequences
tod you to some activities the continent, please come to paris. mark: you mentioned hsbc. that's interesting because we reported on which banks are heading where and it seems like barclays life the look of doubling credits, where the look of frankfurt. hsbc let's look of paris. dublin and frankfurt seems to be ahead. our banks spurning paris because of taxes? because of labor laws? give us some insight. first of all, only one, hsbc, has its closely said they will go to paris. , notther ones are rumors specifically expressed their decision. now, paris is the only one of
the global cities in europe. there is london and there is paris. by the size of the city, by the attractiveness of the city, by the size of the region and also backed by the global economy. far --y, paris is, by and there have been lots of studies around it -- has been the financial center in europe for a long time. in asset management, for example, it is twice bigger than germany in private equity. mark: but how do you fight off the criticism? tax issues in france. the chris is more labor laws -- labor laws?
>> corporate tax is 33% in france. exactly the same level as germany. the french parliament, a socialist parliament, has already voted to reduce the corporate tax to 28% in 2020. a plummet decided by the parliament. of course, we have other issues and we hope that those issues will be improved in the coming months. -- labor possibility mark: if marine le pen were to win in may when they get to the final round of voting -- would you see the interest from the u.k. completely grind to a halt? that after the presidential election, it would
be business friendly government. mark: so you are suggesting it macron or fillon? >> we do not interfere with politics. we are a business. but we have been reading hundreds and hundreds of polls. no one is getting marine le pen. pollswe don't trust the in england. >> but we will see. to the finance world here at the moment is you have three months to wait and you will see. mark: thank you for joining us. do come back in your other guys as well. gerard mestrallet there. bonnie?
donald trump to victory will do the same for her. retailert luxury tiffany, they are out after disappointing sales. mark: should colleges with multibillion-dollar endowments beginning more to help middle-class families pay for schools? vonnie: in france, far right leader marine le pen has formally kicked off her presidential campaign. she declared that the same nationalist forces that led donald trump to victory in the united states will do the same for her. she promised a referendum on france leaving the european union. >> who could find satisfaction in inaction in the face of a system that has us in chains? it rules us because of it's not function. that is why, once elected, i the now announce
organization of the referendum within the first six months of my mandate, whether to stay or leave the eu. mark: british companies are seeing their profits screens because of the fall of the pound. that is according to the british chambers of commerce. the brexitock since vote is having a negative impact on the mystic sales marches. marches.ic sales tiffany's has replaced chief executive officer frederick kumenov. michael halal skied will replace him on an interim basis after a slump in tourist spending and a strong u.s. dollar. year, the fiscal projection fell short of estimates. it should help on its way to sell more prius and lexus models. trade tensions with president trump could have an impact.
he has criticized plans to build factories in mexico. >> time now for our bloomberg quick think. issues of interest. is best thought of as a hedge fund with the university attached. at $35dowment is valued billion. made of large donations and retained earnings to investments, critics are asking whether endowments are doing enough to help students at a time of soaring educational debt. president trump says he wants to make sure that colleges getting tax breaks are making good-faith efforts to reduce the cost of tuition and debt. the congressman of new york wants legislation forcing the university to spend more on middle income students. here is the background. donations of $100 million or more have come in a flurry in recent years. about a dozen were received by universities in 2014 and 2015.
they have grown by adopting aggressive investment techniques. in 1985 65% were found in u.s. equities. that is down to about 4%. yale's chief investment officer says that long-term, it is less efficient in the market. congressional research service report reported taxing endowments at 35% would help produce $15 billion in funding. and that texted options paid by donors to university amounted to about $6 billion per year. around the same time, 30 of the nation's richest schools replaced student loans with grants and financial aid packages. you can read more about endowments on mi quick on the bloomberg. had to bloomberg.com for more stories. mark: still ahead, president trump says the u.s. has done some bad things as he appears to
mark: live from london, i am mark barton. vonnie: i am vonnie quinn and this is bloomberg markets. president donald trump reiterates his appreciation for the russian federation and four president vladimir putin. >> i say it is better to get along with russia cannot. if russia helps us in the fight against isis which is a major fight -- and islamic terrorism all over the world -- a major fight. that is a good thing. will i get along with them? >> putin is a killer. >> we've got a lot of killers. you think our country is innocent?
mark: joining me now is matt winkler. a must read this morning on from his relationship with russia and the economy. is president trump expressing some kind of view on moral equivalency between these countries? >> absolutely. decade,better part of a vladimir putin has been donald trump's favor global leader >>. what is the fascination? can donald trump have an impact on either economy? >> he is now president of the largest economy in the u.s. to the extent that he makes the u.s. a friendly relation to any country that has got to have a positive impact. yes, he could tilt the scale. mark: let's talk about the economic side effects. you have been looking at all sorts of metrics. what is the correlation between an unstable russian currency and
in theic russian economy putin years in the last decade? >> what is so surprising is that for someone so admired by donald trump, vladimir putin, the russian economy has gone from bad to worse during the past five years. and longer. just about every aspect of the russian economy has unraveled. let's start with the currency. it is down 50% during the past five years. but the current account and budget deficits are widening. housing is declining, property values are declining, people are enjoying a standard of living that is deteriorating, so just about every way you look at it, russia is, relative to its global peers, diminished in the economic leadership. it is lacking.
is russiamuch of this facing a trick when it comes to revenue from its services? oil revenue in the first 14 years of the century? what has taken that money to diversify the economy? mark: that is the right question to ask because russia defaulted in 1998. but by the early part of the new century, because oil was resurgent, and in fact would climb as high as $145 a barrel, russia was having annual surpluses. both in the budget and current accounts. by 2008, it could have taken some of those surpluses and diversify its economy which is something american bankers, swiss bankers and german bankers anticipated russia would do. people expected a financial center in moscow.
instead of diversifying, did the exact opposite. it remains reliant on energy. energy has been disappointing. vonnie: saudi arabia is trying to do something now. here on thechart right, you will see russia is coming out of a recession. the rebound in oil prices is helping a little bit. how much does putin have to worry if gdp is an encumbrance? is losing its relative value compared to every other emerging market. by the way, you can see that incorporate russia which is a shadow of its former self. russian companies, compared to their emerging market, retain more earnings and earn more sales. know what they are, but
we do know the global investors have no confidence. how has that manifested? the pe of russian companies is even more popular but it is now half of what their competitors are. like, a market referendum on leadership in russia, putin leadership in russia and investors are saying we don't have any confidence. vonnie: it is fantastic speaking with you. thank you. mark: coming up on the european close, let's look at oil. it has taken a leg lower. let's take a check of the chart 35 minutes away from the end of the session. ♪
mark: we are going to take you from new york to london in the next hour, plus covering stories out of washington and moscow. here are the top stories following on the bloomberg app from around the world. travel ban ruling, president trump and opponents are bracing for the latest court decision which could come today. we look at whether the trump train has run its course in the markets. vonnie: as president trump tries to stale back -- scale back dodd-frank, what impact will that have on european banks? u.s. banks might have a competitive advantage. it is one of the more controversial relationships on the global stage. how will president trump and vladimir putin get along? our guest